Best way to invest? 18-college?

Question

Hi, I'm just finishing up my first year at university and I want to get a little start on investing in, most likely, a mutual fund. I'm wondering what the minimal weekly contribution would be. Would 50-100 get me anywhere? I know it's not a lot of money, and I won't see much of a return on an amount like that. I just want to get a start for when I can actually go in head first. I'm looking for a mutual fund with a decent background and a lot of risk as I'm young and won't miss my money all too much.

So basically, what is the minimal contribution and where should I look? Am I better off with a savings account? Is ING still the best for that? Thanks.

What about ETF's?

Answer 1

In almost ever mutual fund family (i.e. Fidelity, T. Rowe Price, Vanguard, etc.) there is a fund that is specifically tailored for your situation.

I have Fidelity funds and I know them best so I am just going to use them as an example...but very little effort on your part will find others.

If you open a 529 Unique College Savings Plan at Fidelity the minimum is $0 is you promise $50 a month...(sometimes that changes to even less depending on when you sign up)...since you are in college and since it seems like you are pretty smart (investing always is) you'll be there for a while. As such a 529 in your own name is great for a couple of reasons.

1) it's tax-deductible, so if you have a part-time job you don't have to pay the taxes on some of your income (i.e. as much as you put into the 529)

2) you can draw it out to pay for school (that is what a 529 is). By this, you can save up the money that you usually use for school and have enough to meet the other minimums on brokerage accounts and mutual funds and use the money in the 529 for your tuition and bills.

3) it's easy, you don't have to actually do the work...you deposit the money and they invest it in a portfolio for you...during this time you can create a "paper-money" account at one of a few thousand web-sites that offer such a thing and with that you can practice trading and learn how to research without risking real money.

Eventhough all of this can be done on-line, I STRONGLY suggest talking to the folks at whatever brokerage you chose...once you've opened an account you are a member of their "club" and they will help you with the finer details. At Fidelity there is a 24 hours staff to help you with tax questions and investing solutions....so PLEASE use that resource.

Other than that...gig'em, and enjoy the market.

Answer 2

You can go on line and find out the minimum amounts. I have T Rowe Price mutual funds. They usually require a minimum investment of $2,500.00 to open an account and a minimum of $100.00 to add to the account.
Some funds have a $25,000 or $50,000 minimum required investment.
I suggest a mutual fund that tracks the S & P 500 Index. The fund mix is constantly upgraded by Standard and Poors. The mutual fund company's fees are minimal.